|This centre is a member of The LSE Research Laboratory [RLAB]: CASE | CVER | CEP | SERC | STICERD||Cookies?|
Paper No' EOPP 014: | Full paper
Save Reference as: BibTeX File | EndNote Import File
Keywords: not-for-profits; intrinsic motivation, labor donation, free riding
JEL Classification: L31, J32, L33, J42
Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: Economic Organisation and Public Policy
Share this page: Google Bookmarks | Facebook | Twitter
Abstract:We re-examine the labor donation theory of not-for-profits and show that these organizations may exist not necessarily because motivated workers prefer to work in them, or that they dominate for-profits in terms of welfare, but because the excess supply of motivated workers makes the non-profit form more attractive to managers. We show that if firms had to compete for motivated workers then not-for-profit firms would be competed out by for-profit firms. Therefore, the choice between not-for-profit and for-profit provision is not always a question of resolving incentive problems but also one of distribution of rents between management and workers, and consequently, the relative scarcity of workers plays an important role in this choice.
Copyright © RLAB & LSE 2003 - 2017 | LSE, Houghton Street, London WC2A 2AE | Contact: RLAB | Site updated 19 September 2017